St. Paul Real Estate: Trust Us?

According to a Harris poll people don't trust real estate agents. 20% don't trust us at all and only 7% trust us completely.

I understand where this is coming from and am some what relieved. I have been handling rejection for quite some time and took it the wrong way. I thought it was me. I have noticed that people talk to me, and then when I tell them what I do for a living they kind of drift away, but not without making me work by asking questions about property values and home improvements first.

It is easy for me to understand why real estate agents are not trusted, we are sales people and it is easy to get a real estate license. It doesn't help that we attack each other. The news media helps make us look bad. They don't write stories about good real estate agents, they only write stories about bad ones.

The trust thing isn't easy for us either, there are consumers who can't be trusted. I have never seen any polls or statistics but real estate agents do get ripped off or lied to. I have heard some whoppers. Agents get robbed, assaulted and killed on the job, by people pretending to be interested in buying or selling a house.

Sellers can do horrible things to real estate agents. I have worked with unethical sellers and they can be very expensive. Most of us spend a lot of money before the sign goes up and don't get paid until the home sells and the sale closes. We work for free in a high risk, expensive occupation. Most of us are self employed but the general public doesn't get that. They assume I get paid to do an open house or show houses. I don't get paid to do anything ever. I only get paid when a home sells and the sale closes.

Buyers sometimes work with multiple agents and are not honest about it. Showing houses to buyers and educating them on the home buying process is a lot of work. We do the work for free, and another agent gets the commission. That is why we have buyer contracts.

Not everyone on the internet is who they seem to be. This came as a shock but I have read that there are untrustworthy people on the internet, and the internet can be used to commit crimes. There are also assorted lunatics, some are harmless and other are dangerous and I have to sort them out each morning as I go through my email. Much of my business comes from people that I meet on the internet. I ask a lot of questions when they call or write and some are put off by it and go look for another agent. I say no when asked to show vacant properties to total strangers.

The worst kind of client to work with is one who does not trust Realtors. They often don't trust buyers, sellers or lenders either. They do everything they can to work outside the system. By working outside the system they miss out on some of the consumer protection built into the system and they end up becoming a victim.

I try not to think about dishonest people. If I do it makes it harder to do my job. Most of the people I meet and work with are wonderful. I enjoy meeting them and working with them and realize how lucky I am. Most of the real estate agents I come into contact with have been a joy to work with too and I trust them completely.

Comments

Jennifer Klaussen said at June 25, 2008 at 09:50 AM

Well said. You have a gift of gab (wonder what the blog equivalent is of that) to put into words -- and quite eloquently I might add -- what a lot of us are thinking.

I think I'll go out now and work for free some more!

Have a great day
Brad Rachielles said at June 25, 2008 at 11:06 AM

I've been reading this blog and others that you have contributed to for months now and find your writing and photography great. Beyond that are your thought processes and uncanny ability to be on target with current topic.

Rather than jumpping at every chance to show that vacant home to a stranger I have subscribed to the "meet-em, hear-em, help-em, show-em-how-we-work-for-em, relate-to-em, tell-em what to expect and THEN go-to-work-for-em process. No more jumpingjack responses. Those seriously looking for a home really do appreciate a Realtor(R) that takes the time, shows intelligent concern and creates a plan for getting them the home that they want.

Amazingly, the loyalty has increased, the duds have decreased, my hit rate is increasing and everyone I'm working with appears to be better off, including me. The real surprise to me is that I have not lost clients by requiring this step, I've only lost those with uncertain intent or lack of real desire to buy. Not a loss in my book. The time now saved now goes to the real client.
Nate said at June 25, 2008 at 12:20 PM

First, not all realtors are the same. Individuals stand out from the crowd, bad apples hurt everyones reputation.

To my point of view Realtors have two main issues to overcome to gain trust.

One, is that the Realtors Association continutes an unrelenting marketing compaign that many find defies reason. You have various speaking heads that continue to present information that contradicts the rest of the market. After the housing "bubble" and the aftermath, the speeches and advice haven't changed. It's still a "great time to buy", when isn't it? So people lose faith in the value or credibility of your orginizations advice and opinions.

The other issue, is that frankly, too many Realtors have low ethical standards. Look at the amount of discussion that was generated about whether or not it was acceptable to relist a property in order to reset the days on market figure on the MLS. If a significant percentage of your association has no qualms with misleading buyers you can't gain trust.

Essentially there seem to be plenty of Realtors who have no problem acting like used car salesmen. As a group you will have to strive and work to be something better in order to improve how you are viewed.
Teresa Boardman said at June 25, 2008 at 12:45 PM

Nate - couldn't agree more on the talking heads. I roll my eyes when I read the stuff just like I do when I watch the news. As for re-listing houses if my seller wants me to do that I do it. Realtors always have the history and buyers can always ask how long a home has been on the market. They should also ask at what prices and if any work has been done of the home during that time.
said at June 25, 2008 at 02:14 PM

I think that you are missing what it is that we see as untrustworthiness.

Personally, I DO TRUST that probably 95% or better of all agents will deal with me honestly from the paperwork and legal side.

That said, I am afraid that I do not trust realtors very much about anything other than "Today's Price". Realtors are very good at gaging the market price for a house today.

Tommorrow is another story. All the blather about a house being an investment, and real estate being a path to personal wealth, and that prices would go up an up are what is causing people to roll their eyes at the term realtor. Not a single realtor I spoke to last summer when I was shopping called the current market correctly. They all said prices would be much higher by 2008.

Realtors are, as a group, not very correct about economics. Why should they be? Their business is to make money by selling houses. That's fine.

But the consistently rising prices led too many of them to incorrectly assume that their RE license made them infallible forecasters of future prices. Now they are being humbled. Or are they?

Anyway, I give you the bloodhound blog and Greg Swann as poster children to prove my point.

Greg arrogantly dismissed the VERY PLAUSIBLE (and now proven) arguments of those who said housing was in a bubble. He said that the "bubble-heads" (name-calling, how professional) would someday bawl balefully and never admit privately that they had been very publicly very foolish.

How far has his city fallen anyway in median price? He must have been projecting his own characteristics on the bubble bloggers, since he refuses to admit he was wrong. Too proud, Hard head makes for sore butt.

THAT is the distrust many people now have. They were constantly assured by their real estate professional that prices would only go up, and that they were making a sound decision. How many agents, in your opinion, told their buyers "don't worry, you can refinance later." Only to now be unable to refi? I bet a lot.

In the enthusiasm to close deals, many agents sought out only that which confirmed their view, ignoring other signs.

And the distrust of agents' price forecasting and financial advice is a well-earned distrust for many agents.

Bottom line - the system is set up with an inherent conflict of interest for agents. That is undeniable.
Teresa Boardman said at June 25, 2008 at 02:26 PM

You make great points. I am not sure it is inherently set up for conflict. I have not for casted anything all that postitive and have been writing for months about how horrible the foreclosure situation is, yet I continue to get business. I talk people out of buying and selling if it is not in their best interests. I know other agents who do that too. But yet I totally agree with what you are saying because I have heard all of these things myself. I also get why it breeds distrust. Sometimes when I am talking or writing I stop myself because I don't like the way it sounds and it could give someone the wrong idea. Thanks so much for the comment, I really appreciate it.
Riley Smith | Realtor Coconut Grove said at June 25, 2008 at 02:38 PM

I couldn't have said it better myself. I feel as if I am always defending myself and my opinions.

When I say that the market seems to be picking up steam people think I'm lying, when in reality, the market truly is getting better.

When I tell someone that they need to lower their price they think I am under-valuing their home and just trying to get it sold for my benefit.

I have learned to study and memorize the numbers so that I have hard facts to give my clients. It seems less like bs when you have actual statistics to back you up.
Chris Griffith said at June 26, 2008 at 06:27 AM

Excellent Teresa.
Patient Buyer said at June 26, 2008 at 06:27 AM

Teresa-

The comment above was mine, I forgot to sign it.

To clarify - I have read your posts for a while now and feel that you are representing the market truthfully, so understand that my comments are not directed at all agents. In fact, at an open house a couple months ago, I spoke to the agent there and he said that he didn't think we would be out of the woods for another year or two. I was very surprised to hear that, since most of the other houses I visited that day had agents that told me I'd better buy soon or I'd be sorry.

In fact, there is/was a large billboard in uptown right by Franklin and Hennepin where a local agent is implying that if you don't buy now you will cry bitter tears in the near future, when housing again becomes too expensive.

I'll bet that same agent complains regularly about how the 'terrible media' is ruining the housing market with their contemptible fear-mongering. Yet Mr. "There will never be a better time to buy" is trying to create fear himself. The irony is stunning. What a jerk - playing on one of the lowest levels of human motivation - greed & fear.

As to the conflict of interest, I think it is undeniable from a buyer's point of view.
* Your agent is paid by the seller, in effect.
* Your agent is paid more if you pay more
* A seller's market means agents make a lot of money, since people are spurred into buying by the rising prices, whereas buyer's markets are slower for business

I bet money that if you asked 100 agents whether they prefer buyer's markets or seller's markets, that they prefer a seller's market. We just came of a great long term seller's market a couple years ago, and the RE business was practically glowing, if you get the inference.

Please understand the subtle point here, though.

Just because a conflict of interest EXISTS, does NOT MEAN that the person who works in that environment will act unethically.

I think it is more truthful for agents to agree with the reality that a conflict exists and to point out that their ethical standards rise above it and they act in their customer's best interest regardless. Trying to explain away the obvious conflict of interest is not as credible. It just does not ring true.
Teresa Boardman said at June 26, 2008 at 06:48 AM

Well said PB. Nice to get a comment, it has been awhile.
Michael Oliver said at July 01, 2008 at 12:07 PM

This post is great and spot on! Everything you said is pretty much how it is, the public just assumes because we took a listing were getting paid big money when its the exact opposite that we just took on additional expenses unless it sells. Its a very difficult business to be successfull at and few understand the amount of difficulties that clients will put an agent into on purpose. Then once they do that they expect you to still do all types of other things that are not going to happen and when you tell them no, then go and try to burn someone else because there is always a line of hungry agents just trying to get paid off a deal regardless. Those same hungry agents last 12-24 months tops and then are back to their old gigs doing whatever, and the cycle repeats itself over and over.